Auction rate securities are long-term fixed-income investments with terms of twenty to thirty years or more that incorporate periodic adjustments to the interest rate, causing them to behave more like short-term investments since each interest rate adjustment changes the projected return on the investment.

A Collateralized Debt Obligation (CDO) is a specific type of asset backed security that is created through the securitization of various fixed income products. The basic purpose of this security is to hold assets as collateral and then sell the cash flow from the different tranches, or credit quality tiers, to investors